City attorney: Cost of outside legal counsel is confidential

The City of Prescott is considering spending an undisclosed amount of money to defend against a lawsuit by a local business.

In late September, Pure Wafer Inc. - a silicon wafer reclamation facility near the Prescott Airport - sued the city regarding a difference of interpretation over the amount of fluoride that Pure Wafer puts into the city's wastewater treatment system.

The city had earlier approved a consent order from the Arizona Department of Environmental Quality (ADEQ), agreeing to deal with the high levels of fluoride that had been detected in Prescott's treated sewage. The city attributed the problem to Pure Wafer, which reportedly uses hydrofluoric acid to scrub wafers for recycling.

At about the same time, the city also approved a wastewater pre-treatment program that imposes stricter standards on wastewater emissions.

Pure Wafer's lawsuit seeks an injunction against the pre-treatment ordinance, maintaining that the design and construction of the improvements required under the new rules would cost $1 million or more, and that the cost of operating the new facilities would exceed $325,000 per year.

At Tuesday's study session, the Prescott City Council discussed entering an agreement with the Dickinson Wright Mariscal Weeks law firm for legal representation in the suit.

City Attorney Jon Paladini has maintained, however, that the city should not publicly disclose the amount of money involved because such information would reveal the city's legal approach.

"My view is that publicly setting caps on litigation approval could tend to reveal strategy to the other side," Paladini said. "I recommend against doing that."

The city's legal department earlier sent City Council members a "confidential and privileged engagement and representation letter" concerning the cost of the representation.

In addition, Paladini said his department would provide the council regular updates on the amount of money spent to date - information that would also be available to the public.

The legal representation agreement is not Dickinson Wright's first involvement on the matter. Prior to the litigation, the law firm assisted the city with the ADEQ consent order, as well as in response to Pure Wafer's demand letters that led up to the lawsuit.

On Wednesday, Paladini estimated that the city had paid Dickinson Wright about $105,000 over the previous year or so to deal with those earlier issues.

Pure Wafer's lawsuit maintains that the company (formerly Exsil, Inc.) entered a "bargain" with the city in 1997 under which the company would build a $45 million silicon wafer reclamation facility that would employ as many as 100 people.

In exchange, the city would provide water capacity of up to 195,000 gallons per day, and sewer capacity to receive up to 195,000 gallons per day.

The city filed an answer and counter claim on Oct. 30, claiming that Pure Wafer knew or should have known of the city's obligations and that applicable federal, state, and local environmental laws were subject to change.

Councilman Jim Lamerson noted on Tuesday that he "did not want it to go unsaid" that the city and Pure Wafer have had a good business and employment partnership through the years. "Hopefully this will resolve itself to everybody's satisfaction," he said of the legal issues. "And we're working towards that."

The City Council is expected to vote on the agreement with Dickinson Wright on Nov. 26.